Pros

Cons

Some help links lead directly to IRS documents.
Expensive per-state filing.

Bottom Line

TaxAct Online Plus features an excellent user interface, navigation, and help tools.
Furthermore, its low federal e-filing cost makes it one of the best values among tax preparation services this year.

Feb. 1, 2019

TaxAct has undergone several changes since last year. It has altered its lineup and made the modifications necessary to accommodate the new rules in the Tax Cuts and Jobs Act. It also looks fresher and more polished, thanks to a user interface overhaul, though returning users shouldn't have trouble finding their way around. TaxAct is a good, thorough online tax app for some taxpayers, primarily homeowners who want to itemize.

TaxAct Pricing and Options

TaxAct broke the price barrier when it introduced completely free online personal tax preparation and e-filing (both federal and state) several years ago. It no longer makes that offer. Its free product only covers the new 1040 and retirement income; state returns are still free. These days, Credit Karma Tax is the only service that supports all the major forms and schedules (both federal and state) for free. Of course, you get what you pay for, and what you're not paying for (and don't get) with Credit Karma Tax is a deep and thorough help system.

TaxAct's product lineup has changed, as mentioned. Because of these shifts, you'll be paying more for some tax topics than you did last year. Basic Plus ($9.95 federal) covers dependents (which H&R Block offers in its free version) and some other deductions like college expenses. We're tested TaxAct Deluxe Plus this year ($29.95 for federal filing), which is designed for itemizers and homeowners. If you have to report on capital gains or losses or rental property, you'll have to pay $5 more (federal) for Premier Plus, which also includes prioritized support. The top-of-the-line service and the only one to offer Schedules C and F is Self-Employed Plus; federal returns at this level cost $49.95.

Those prices are very much on the low end of the tax software spectrum. By comparison, TurboTax's entry-level plan lists for $59.99 and rises to $119.99 for the top-end Self-Employed version. To that you'll add $39.95 per state return. H&R Block starts at $29.99 for Deluxe and adds $36.95 per state. TaxSlayer is also reasonable at just $17 for federal and $29 per state. If any of those are too steep for you, Credit Karma Tax offers completely free federal and state filing, and FreeTaxUSA is free for federal and $12.95 per state. Note, however, that with the free services you sacrifice quite a bit when it comes to hand-holding, which you're likely to need at some point during the process.

State returns for all versions except Free and Basic Plus are $39.95 per state—more than the federal return costs in some cases, but in line with what TurboTax and H&R Block charge. You'll pay $19.95 to file a state return using Basic Plus.

TaxAct offers what it calls the Price Lock Guarantee. No matter when you file, TaxAct charges you the price the product was when you started your return. Tax websites tend to get more expensive the closer you get to the filing deadline, and competitors generally charge you whatever the rate is at the time you file. That's one reason it generally doesn't pay to be a last-minute e-filer.

TaxAct's Wizard Wizardry

TaxAct, like its competitors, is an online version of all those paper documents you would otherwise have to assemble to do your tax preparation. If you have a complicated financial life and have ever tried to complete your return on paper, you know how frustrating and time-consuming it is to keep flipping back and forth between forms and schedules, doing all your calculations, and transferring the correct numbers to your 1040. And, political PR notwithstanding, filing your taxes hasn't gotten simpler this year.

TaxAct makes this grueling process more organized and manageable. Like a human being in a tax preparer's office would do, it interviews you to get all the information needed to complete your return, taking you through a lengthy step-by-step wizard. All you have to do is answer the questions on each page before you advance to the next one. Sometimes you have to fill in a number or a few words, whereas other pages ask you to select responses from lists of options.

As you enter information, TaxAct does the necessary calculations and puts your answers onto the appropriate lines on the right forms or schedules. At almost every step of the way, it offers support of one kind or another, including myriad references to the Tax Cuts and Jobs Act changes. After you visit every topic applicable to your situation, TaxAct goes through your return and alerts you to potential problems before allowing you to e-file or print out paper returns to mail. You aren't asked to pay until this point, as is usual with these services.

Early Tax Info

Your first steps in getting started are to create a username and password, enter a code sent by text or email, and choose security questions and answers. The service also asks if you want to import your tax data from last year. TaxAct Deluxe Plus can bring in that information if you have a PDF file of your 2017 return that was prepared by another service. This can save you a lot of time and improve the accuracy of your return, too—assuming your data was correct last year.

If you're starting from scratch, TaxAct Deluxe Plus next has to get some basic information about you up front, such as names and addresses, birth dates, and Social Security numbers. It does this in a fairly straightforward, serious way. Other services, such as TurboTax and (to a lesser extent), H&R Block, try to be a little friendlier and even folksier here and throughout the interview process. This doesn't affect the actual tax preparation, but some may find a chummier interview can make what can be a tedious experience a bit more pleasant.

Then it's on to questions about dependents and your filing and health insurance status. The final step before you begin the actual tax preparation Q&A is the Life Events screen. This page displays checkboxes for 18 different situations that could have an impact on your tax preparation, including marriage, divorce, retirement, moving expenses, and home ownership. You select the ones that apply to you and TaxAct Deluxe Plus makes sure to take you through their related screens in the interview.

Two Tax Paths

So far in the process, making your way through TaxAct has only required clicking the Continue and Back buttons, entering data, and selecting from lists of options. It's easy even in these early stages to know where you are in TaxAct (this will become increasingly more important the deeper you go). The next step, however, involves a navigational choice.

First, a little explanation: Most personal tax preparation apps use similar navigation tools. In TaxAct Deluxe Plus, the old horizontal toolbar at the top has been moved over to the left and displays vertically. It's divided into the site's main sections, including Basic Info, Federal, and Review. When you work in one of those areas, the toolbar changes to reflect the subsections found there. So, for example, you'll see tabs for Income, Deductions, Credits, Taxes, Miscellaneous, and Summary under Federal—the same way it was set up last year.

Tax programs also generally offer two options for moving through the interview process. If your return is simple or you have experience with tax preparation, you can simply select the topics in each area that apply to you from the lists provided—via the Quick Q&A Topics section in TaxAct. The main topics that are relevant to the Deluxe Plus version include Wages and Salaries, Education, and Child and Dependent Care, most of which have associated subtopics. Click any of those, and TaxAct Deluxe Plus takes you directly to the appropriate Q&A page for that tax situation. When you finish and click Continue, you return to the main page, from which you can choose another Quick Q&A Topic. This works very well, and not every tax website supplies such a detailed outline.

If you're less experienced or want to be sure you don't miss anything, you should click Step-by-Step Guidance. When you work under the Federal tab, you first see a list of all income topics. Click the boxes to select just those that apply to you or click on the "all of the income topics" option at the bottom of the screen if you want the service to walk you through every possibility. TaxAct Deluxe Plus then quizzes you about every income-related topic covered in Form 1040, as well as supporting forms and schedules. You can skip any that don't pertain to you, but this process ensures that you don't miss anything.

There are multiple ways to respond to the site's queries. You fill in blanks, click in checkboxes or select from lists, click on Yes or No, and so on. If your employer or financial institution is supported (and many are), you can import data from forms like the W-2 and 1099s. When you add a copy of the 1099-INT (for interest income), for example, TaxAct asks whether you want to enter your data on a reproduction of the form itself or use its step-by-step guide.

If you're working with a field that contain calculated totals, you can click the icon that looks like a hand holding a pencil, which lets you enter the individual items that made up those totals in the table provided. This is for your own information only and won't be filed. It's a helpful way to document your work, and none of the other products offers it.

When you finish the income section, you enter information about any estimated tax payments you made and arrive at a summary of all the data you've submitted so far. You can review and edit any entries you've made or just move on to deductions and credits, which are handled the same way as income.

After you complete all of the federal screens, TaxAct transfers applicable information to any state return you must file and helps you complete it. Once you think you've taken care of all pertinent topics, TaxAct runs its exceptional review tool, looking for possible errors and omissions. When it finds and error, the tool displays the error on the screen and provides fields for corrections and additions without forcing you to find your way back to the original page.

For software that automates a process as anxiety-producing as personal tax preparation, a compelling interface is essential. Skillful, creative design can make any user experience just a little less draining. TaxAct Deluxe Plus has greatly improved that element of its tax prep site this year. Screens are clean and attractive and easier to read—not as claustrophobic as they've been in years past. TurboTax still has the overall edge in terms of providing an exceptional user experience, but TaxAct Deluxe Plus is catching up.

Help and Cleanup

Excellent built-in help and support are critical components of effective tax preparation software. These applications can't be expected to help extensively with every obscure and complicated tax topic (though they might surprise you in this regard). They should, however, at least pose questions in plain language and provide additional explanations on the screen that answer the most common questions.

You should also have the option to click on hyperlinked words, phrases, or buttons that take you to even clearer, simpler guidance for advanced topics. At the very least, these services should have a searchable database that puts the best-matched links at the top of the results list. Tax preparation websites that do well in our rankings clarify complex IRS language.

TaxAct has several points in its favor here. It often displays context-sensitive help topics in the right vertical pane (along with more general FAQs). Hyperlinked words and phrases open the glossary to the correct entry. You can click the small circled "i" link where it appears to open a small help window. When you enter a word or phrase in the search box, the Answer Center opens and displays both explanations—sometimes quite lengthy—and links to related forms and schedules. Finally, phone and email help are free. Of course, you're much more likely to get a quick response if you file early, before everyone else. That's just one more reason not to be a last-minute e-filer.

The site's Answer Center was down for a period of time during our evaluation, but it eventually came back online. Another negative: I was told several times that I could read a specific IRS publication (which they provided access to) for more information. These are, of course, by definition accurate documents, but they can be difficult to decipher. The ability to avoid IRS documents altogether is a big reason for using a tax-preparation software in the first place.

An Effective Mobile Translation

Although TaxAct doesn't offer standalone apps, the company has done a beautiful job of using responsive design to translate the desktop version into a solid mobile experience. We tested its Android app and iPhone app. Both versions look and work like the desktop version. Click a link in the upper-left corner, and the site outline opens. Click on Federal, for example, and a menu displays links to the Form 1040's core sections. Click a link in the upper-right corner, and you get access to the support and tools found in the right vertical pane in the full version. TaxAct manages to reproduce the content, navigation system, and help resources you'd find if you were using it on your PC.

Tax preparation websites tout their solutions' transportability. That is, you can start your return on one device and pick up where you left off on another by signing in. Having similar user interfaces on both mobile and desktop editions makes this much easier.

A Safe, Affordable Choice

TaxAct Deluxe Plus offers good tax form and schedule support, user interface and navigation, and help. It also boasts one of the lower-priced options among online tax services. If you've used it before, there's no real reason to switch. However, it doesn't excel to the extent that H&R Block Deluxe, our Editors' Choice for tax software, does, particularly when it comes to the all-important issue of tax help.

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About the Author

Kathy Yakal has been annoying computer magazine editors since 1983, when she got her first technology writing job because she tagged along with her ex-husband on a job interview. She started freelancing and specializing in financial applications when PCs became financial tools for consumers and small businesses (after a stint at a high-end accounting software company). She’s written for numerous publications over the years, and about the only one that’s survived her besides PC Magazine (where she started writing in 1993) is Barron’s. When she can get the cats off her desk, she writes for @Work and Solutions, as well as contributing product reviews. See Full Bio